Budgeting an independent feature is equal parts math, strategy, and crystal‑ball gazing. Vendors quote net‑30 but want deposits today; unions grant low‑budget waivers but still tack on fringes; financiers won’t cash‑flow unless the numbers survive a completion‑bond audit. Below is a pragmatic roadmap—spiked with union thresholds, percentage benchmarks, and “inside baseball” tips I’ve learned (sometimes the hard way).
1. Start With Your “Red Lines”
| Tier | Total Budget (USD) | Union Levers |
|---|---|---|
| Micro | ≤ $300 K | SAG‑AFTRA Ultra‑Low Budget Agreement (UPA) |
| Low | $300 K – $2 M | SAG Low Budget; DGA Theatrical Low Budget |
| Mid | $2 M – $8 M | Standard guild minimums; still qualify for many state incentives |
| High (Indie) | $8 M – $20 M | Completion bond all‑but mandatory; studio accounting norms kick in |
Inside tip: Lock the tier before you start talent talks. If your star’s quote nudges you from UPA to Low Budget, payroll fringes alone can add six figures overnight.
2. Build Your Skeleton: ATL, BTL, Contingency
| Bucket | % of Total | Notes |
|---|---|---|
| Above‑the‑Line | 20 – 40 % | Actors, director, screenwriter, producers. |
| Below‑the‑Line | 45 – 55 % | Crew, equipment, locations, travel, post. |
| Contingency | 8 – 10 % | Required for SAG budgets; bond co. may insist on 10%. |
| Bond & Insurance | 3 – 5 % for bond + 1 % E&O | Charged on negative cost (budget minus bond itself). |
| Fringes / Payroll Tax | 15 – 30 % of labor | Varies by state and union. |
Data booster: Run your script through Prescene to get an automatic scene‑day breakdown. Pair that with Movie Magic to calculate crew days and fringes in minutes instead of eyeballing page counts.
3. Unpack Below‑the‑Line Like a Bond Company
Production
- Crew day rates – Negotiate package deals; many heads of department (HODs) will defer part of their rate for backend or credit upgrades on passion projects.
- Equipment rentals – Ask vendors for “step‑up” clauses: pay micro‑budget rates now, but bump if financing closes above Tier‑X.
- Locations – Lock your “Hero” locations first; secondary interiors can slide to cheaper counties once incentives are approved.
Post‑Production
| Line Item | Budget Rule of Thumb |
|---|---|
| Picture edit | 8 – 12 weeks at $2‑3 K/week assistant + $3‑4 K/week editor (low‑mid tier) |
| Sound design & mix | 2 – 5 % of total budget |
| Color grade | $1500 – $3000/day, 5‑10 days for a feature |
| Deliverables | $8‑12 K for DCP, M&E, caption files—often forgotten! |
Music
- Needle drops (existing songs) can blow up a budget. Negotiate festival‑only licenses first; pay “step‑up” to worldwide distribution later.
- Composer – Flat fee + music‑prep costs; buyouts are standard in low‑budget land.
4. Don’t Forget Hidden Costs
- Fringe creep – Workers comp rates rise the moment you cross state lines.
- Cash‑flow charges – Gap lenders take 2–3 % to advance tax incentives.
- Deliverables audit – QC passes can run $75/hour; budget two rounds.
- Residual reserves – Streamers sometimes withhold 10 % until union residual escrow is funded.
5. Cash‑Flow & Incentives
- Soft match the tax credit—most states refund only qualified spend paid in‑state and many exclude ATL over $15 K/week.
- Swing loan – Use a bank LOC to advance 80 % of the expected credit; interest ~6‑8 %. Build interest into finance fees.
- Quarterly draw‑downs – Align investor tranches with bond‑co. cash‑flow schedule; avoid running dry between payrolls.
6. Completion Bond Scrub
Bond underwriters flag:
- Pay‑or‑play clauses above 40 % of ATL.
- Overlapping hold dates for lead cast (causes schedule crunch).
- Unrealistic page counts (anything >6 pages/day signals risk).
Prescene’s scene‑length report helps you defend an aggressive schedule with hard data when the bond rep challenges your call sheet.
7. Tracking & Reporting
- Cost Report Hot‑sheet – Update weekly during principal; accounting wraps lag decisions by 7‑10 days.
- Cost‑to‑Complete – The bond company will request these constantly; automate from your accounting software.
- Variance Codes – Flag creative adds separately from unavoidable overages (e.g., weather, Covid testing) so financiers see you’re protecting the negative cost.
8. Festival & Release Reserve
Even if you intend to sell at Sundance or SXSW:
- Festival travel/promo – $25‑40 K for filmmaker + key cast (flights, lodging, per diem, PR rep).
- Awards delivery – DCP recuts, press stills, trailer edits.
- Publicist – $10‑15 K for Tier‑1 festival run; cheaper if bundled with sales agent.
Set aside at least 3 % of budget for these downstream costs—buyers notice polished materials.
Quick‑Start Checklist
- Lock budget tier (SAG/DGA threshold).
- Run script through Prescene for scene & character metrics.
- Draft top‑sheet with ATL, BTL, contingency, bond, fringes.
- Shop tax incentives; pick state with best net after travel.
- Plug in union minimums (Schedule F, DGA low‑budget rates).
- Add 10 % contingency & 5 % festival reserve.
- Stress‑test cash flow with bond cash‑flow template.
- Present to investors with comps & tax‑credit forecasts.
Final Thoughts
A dialed‑in indie budget is both a sales document (for investors) and a roadmap (for your crew). Use hard numbers—union minimums, real vendor quotes, state incentive math—plus intelligent assumptions about contingency and fringe creep. Tools like Prescene streamline the first pass by quantifying page counts, character days and scene complexity, freeing you to focus on deal‑making and creative trade‑offs.
Budget tight, track everything, and your film stands a far better chance of reaching not just the festival, but the marketplace.
Happy budgeting!
